Procurement Changes Pack Purchasing Power

By Katherine McIntire Peters

April 1, 1997

hen employees at one federal agency needed new heating equipment, they followed procedure and took their request to the agency's Contracting and Acquisition Management Office. Two hours and 48 minutes later, the equipment was installed. If that sounds like some bureaucrat's fantasy, it shouldn't. It really happened at the Army's Space and Strategic Defense Command, which has the most efficient contracting activity in the Army, according to statistics compiled by the Army Materiel Systems Analysis Activity.

"My guess is we're the most efficient office in the federal government," says Mark Lumer, the principal assistant responsible for contracting at SSDC. He may be right. Lumer runs one of the lowest-cost contracting operations in the public or private sector, spending three-tenths of one cent to buy a dollar's worth of goods or services-far less than other comparable organizations inside and outside government, according to an Arizona State University study.

Between 1992 and 1995, Lumer lost about one-third of his contracting office to Defense personnel cuts and expects to lose more people over the next two years. At the same time, the acquisition reformers at Defense and the Office of Management and Budget were busy dismantling much of the framework of federal contracting, replacing it with more flexible rules and procedures designed to give federal managers much more freedom in purchasing goods and services.

"I recognized early on we were going to be in a constant state of change. I decided I could either strap on some skis and ski down the avalanche or get buried by it," Lumer says. To that end, Lumer says he's taken advantage of every streamlining opportunity afforded through acquisition reform initiatives. The following areas in particular have yielded significant efficiencies and savings for the agency:

The contract office is rapidly becoming a paperless operation. By publishing expanded synopses in Commerce Business Daily when soliciting commercial items, the agency no longer produces paper requests for proposals (RFPs) for such items. Contractors are referred to the agency's Internet address, www.ssdc.army.mil, where they can download full solicitations. They also can submit bids electronically.

By relying on oral presentations from contractors, SSDC has cut the time it takes to evaluate bids and award contracts from about three months to less than two weeks. Contractors are asked in advance to give presentations on how they would solve or perform two different problems or tasks. During evaluation they are given a third sample problem on the spot.

SSDC has saved thousands by using credit cards for purchases formerly made through traditional procurement channels. In addition to saving money, the program has cut paperwork and dramatically reduced the time it takes to purchase goods and services. Lumer expects to accrue further savings by eventually replacing credit cards with debit cards. Such cards would eliminate the $32-per-check fees the Defense Finance and Accounting Service charges SSDC to write the checks to cover credit card bills.

To accommodate personnel cuts and changes in contracting rules, restructuring and retraining has been critical. Most notably, all but two layers of management have been eliminated; everyone in the contracting office is trained to do procurements, including Lumer's secretary; and several cost analysts are being retrained to become market researchers, reflecting the new demands on the office.

The changes at SSDC have not come easily, Lumer says. The most difficult aspect of acquisition reform has been to change people's attitudes, both inside and outside the contracting office.

"I thought I understood how difficult this would be but I grossly underestimated it," he says.